Dipna Pharmachem Ltd Management Discussions

a. Overview of the Indian Economy:

Indias economy has experienced a significant surge over the past nine years, elevating it from the 10^th to the 5^th position in the global rankings, thereby establishing its position as a major economic powerhouse on the world stage. For FY 2022-23, Standard & Poors credit rating for India stood at BBB(-) with a stable outlook, Moodys credit rating stood at Baa3 with a stable outlook, Fitchs credit rating was reported at BBB(-) with a negative Outlook. In FY22, Indias nominal gross domestic product (GDP) at current prices was estimated at Rs. 232.15 trillion (US$ 3.12 trillion). Notably, India is home to over 100 unicorns valued at US$ 332.7 billion, making it the third-largest unicorn base globally.

Indias economy primarily thrives on domestic demand, with consumption and investments accounting for 70% of economic activity. The Union Governments financial performance in the fiscal year 2022-23 has remained strong due to the revival of economic activity, an increase in gross tax revenues from direct taxes and Goods & Services Tax (GST), and realistic assumptions in the Budget. As the economy recovers from the Covid-19 pandemic, investments have been made across various sectors, boosted by government PLI

schemes. The Union Government has maintained its focus on capital expenditure (Capex) during the year. The Centre has also incentivized the State Governments through interest- free loans and enhanced borrowing ceilings to prioritize their spending on Capex. Indias services exports have remained resilient during the Covid-19 pandemic and amid geopolitical uncertainties driven by higher demand for digital support.

B. Outlook:

The recent reopening of economies has fueled a faster-than- anticipated recovery. Global growth is forecast to change from 3.2 percent in 2022 and 2.7 percent in 2023. However, economic activity continues to be affected by the increase in interest rates aimed at combating inflation and financial market turbulence. The rapid spread of the COVID-19 pandemic in China also impeded growth in 2022. Furthermore, Russias military intervention in Ukraine caused extensive damage to physical infrastructure and led to the displacement of over a million people. Accordingly, the strength of this projected recovery will vary across countries, depending on the severity of the pandemic, the extent of domestic disruptions, and the effectiveness of government policy support to stabilize their economies. Global inflation is expected to decline from 8.8 percent in 2022 to 6.6 percent in 2023 and further to 4.3 percent in 2024.

C. Indian Chemical Industry:

The Indian chemical industry is an integral component of the Indian economy, contributing around 6.7 per cent of the Indian GDP. It touches our lives in many different ways. Whether it is thermoplastic furniture we use, or a synthetic garment we wear, or a drug we consume - we are inextricably linked to it.

The chemical industry of India is a major industry in the Indian economy and as of 2022, contributes 7% of the countrys Gross Domestic Product (GDP). India is the worlds sixth

largest producer of chemicals and the third largest in Asia, as of 2022. The value of the Indian chemical industry was estimated at $100 billion dollars in 2019. The chemical industry of India generates employment for five million people. The Indian chemical industry produces 80,000 different chemical products. India was also the third largest producer of plastic in 2019. As of September 2019, the alkali chemical industry produced 71% of all chemicals produced in India. Indias chemical industry accounts about 14% of production in Indian industries.

D. Opportunities and Threats:

Opportunities:

> Indias specialty chemicals companies are expanding their capacities to cater to rising demand from domestic and overseas

> With global companies seeking to de-risk their supply chains, which are dependent on China, the chemical sector in India has the opportunity for a significant growth.

> Rise in demand from end-user industries such as food processing, personal care and home care is driving development of different segments in Indias specialty chemicals market.

Threats:

> The competition has increased from Domestic and other developed countries.

> Because firms can enter and quit an industry with few limitations, the number of substitutes in the same product line at different prices poses a risk of losing the investor base.

> Threats for this Industry are very common and every person is aware of the threats and the risks involved with this Industry.

E. Segment-wise or Product-wise performance:

The Company is primarily engaged in single segment i.e. Pharmaceutical Trading.

F. Future Outlook:

The Company presents the analysis of the Company for the year 2022-23 & its outlook for the future. This outlook is based on assessment of the current business environment. It may vary due to future economic & other developments, both in India and abroad.

G. Internal control systems and their adequacy:

The Company has taken adequate preventive and precautionary measures to overcome all negative factors responsible for low trend to ensure steady growth.

H. Discussion on financial performance with respect to operational performance:

The financial performance of the Company for the Financial Year 2022-23 is described in the Directors Report of the Company.

I. Material developments in Human Resources / Industrial Relations front includingnumber of people employed:

The cordial employer - employee relationship also continued during the year under the review.TheCompany has continued to give special attention to human resources.

j. material financial and commercial transactions:

During the year there were no material financial or commercial transactions.

K. key financial ratios:

In accordance with the SEBI (Listing Obligations and Disclosures Requirements) Regulations 2018 (Amendment) Regulations, 2018, the Company is required to give details of significant changes (change of 25% or more as compared to the immediately previous financial year) in Key sector-specific financial ratios. In this regard, the Company has no significant changes in any key sector-specific financial ratios to report.

L. human resources:

These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company operations include global and domestic demand supply conditions, Government regulations, tax regimes, economic developments and other factors such as litigation and business relations.

M. CAUTION STATEMENT:

Statements made in the Management Discussion and Analysis describing the various parts may be "forward looking statement" within the meaning of applicable securities laws and regulations. The actual results may differ from those expectations depending upon the economic conditions, changes in Government. Regulations and amendments in tax laws and other internal and external factors.

Registered Office:

A/211, Siddhi Vinayak Complex, Near D.A.V.

School, Makarba, Ahmedabad - 380 055

Place: Ahmedabad

Date: 6th September, 2023

 

By the Order of the Board of
Dipna Pharmachem Limited
Sd/-	Sd/-
Keyur Shah	Dipna Shah
Managing Director	Director
DIN: 03167258	DIN: 02507462